This is not good news. Certainly, our current economic climate is not one that encourages saving (you know, with low interest rates and all), but that doesn’t mean it’s not important.

Money in savings provides a safety net for unexpected expenses. Saving money forces us to spend less than we make. And when the time comes for a major purchase, you’ll be glad you’ve been saving up.

The problem isn’t that we haven’t thought about saving money, the problem is that too many of us just aren’t doing it.

There are any number of reasons why people are not saving money. They may not think it is urgent or they may not have taken the time to set up a savings account. But my suspicion is that most people are not setting aside money for savings because they don’t think they have enough to do so.

When everything that gets earned, gets spent, saving is impossible. At the end of the month, there is simply nothing left over to save. So the action gets pushed to the next month… and then the next… and the next.

How then can we break that cycle in our lives?

I’d like to offer a simple idea to get you started—in fact, it is the same idea I give when people ask me about charitable giving.

Start small and start today.

I speak often about the benefit of generosity in our lives and how it improves our well-being and life satisfaction. The conversation is often followed by a simple question, “How do I get started? I want to be charitable, I just don’t see how I can be.”

My answer is this, “Just start with $1. Literally, $1. Go find a cause that you believe in and donate $1. Don’t be embarrassed. Because of online giving, you’ll probably never stand face-to-face with anybody anyway. So just start there. Go donate $1 today and see what happens.”

Of course, my hope is not that the person will end their charitable giving with a $1 donation. Instead, my hope is that they will donate $1 and soon discover that they still have food on the table, a roof over the head, and clothes on their back. They can be generous and still survive.

Soon, I hope, they will try giving $5/month. Inevitably, again, they will discover their needs are still being met. Maybe they had more capacity for generosity than they thought. Maybe then they will try $10/month or $15/month.

They did have room for generosity all along, they just needed to discover that was true.

The same is true when it comes to saving money.

If you want to spend less than you make, start building a savings account, and begin getting ahead financially, you can do it. Even if you don’t think it is possible, I believe it is. Start small and discover it is true yourself.

Think of the stress you can begin to alleviate by taking two small steps:

1. Set Up a Savings Account.

It is important to put your money for savings into a different account than you use for daily, weekly, and monthly bills.

Almost every bank offers savings accounts so check with your local bank first—wherever you already have an account established. However, sometimes these local banks have minimum balance requirements for savings accounts. If you are starting small ($10/month), you’ll want to check that first.

If you cannot find a local financial institution with a no minimum balance savings account, or if you prefer to conduct your finances online anyway, I use Capital One 360. They have a convenient, no minimum balance savings account available—and will even give you $25 for signing up. It’s easy to use—it took me less than 10 minutes to open an account with a $10 opening balance.

2. Set Up a $10/Month Automatic Withdraw.

Just start with $10. Literally $10. Set-up a savings account today and deposit $10. Don’t be embarrassed at the amount. If you select the online option above, you won’t ever have to interact face-to face with anybody anyway.

Deposit $10 and then set up an automatic withdrawal of $10/month, as close to the day you get paid as possible.

And then see what happens. Almost certainly, you will still have food on the table, a roof over your head, and clothes on your back. Once you prove that you can survive and save at the same time, raise your monthly contribution to $15/month or $20/month. Over time, perhaps, you’ll be able to increase the amount even more. But the first goal is to prove to yourself that you can save.

Your first investment into your financial security doesn’t need to be a big one. But you do need to start somewhere.

About Joshua Becker

Writer. Inspiring others to live more by owning less.WSJ Bestselling author of The More of Less.

Comments

I actually think one of the benefits of the monthly withdrawal set-up (especially for people with very tight incomes) is that the automatic withdrawal helps people further decipher essential from non-essential.

To add onto this reply, Chase often does promotions to draw new customers by giving a sizeable amount of money to a new customer for setting up a new account that has a monthly automated deposit. In my case, I received $250 for opening a new account that has an automated deposit each month. I did this three years ago and have been very pleased with Chase ever since. I don’t work for Chase or anything like that. I just want to let others know that if they see their offers, they are legit.

“Start small and start today” is GREAT advice for young and older alike. I am still surprised how quickly savings have accumulated. Having a sizable nest egg can reduce stress and add quality to your life.

When my husband and I started tracking every single dollar that came in and went out, we were surprised by all the wasteful spending and found ways to give and save more. I’m also thankful for a sweet woman who gave us a ceramic piggy bank for my first baby shower. Our daughter is now 4 and loves feeding the pig every night before bed. And we love teaching her the importance of saving. Best shower gift we received.

I like this post. I would add that one more component to saving is having a written budget. When my husband and I started tracking how much we spent, then developing a written budget we were able to go from not being able to save anything to having a sizeable extra to save, with no income increase.

We have all heard the proverbs like “a penny saved is a penny earned”, “unless things change they stay the same”, “the longest journey begins with a single step” and many others. None of these mean anything if we don’t take action. Thanks for clearly describing a simple set of actions almost anyone can take as the “single step” at the beginning of their journey.

I love this! One thing I learned growing up is that when you have two incomes (you plus your spouse for instance), live off of the person who makes the least amount monthly and save the other income. My husband and I recently got married and have been doing this the past couple of months. It’s nice to know that you can survive off of one salary if one of us were to lose our jobs. Plus, it helps to increase our savings at a faster rate. :)

I’m so glad you wrote this. It’s unfortunate that so many Americans grow up without being exposed to proper saving habits– and then our consumerist culture exalts spending as a vital component of our identity. I’m hoping for a better future; even the fact that our world is so much more connected now– and information is readily available– is an encouraging sign.

Good place to start for those daunted by naming every dollar. Shocking stats in your links. Thankful for the emergency fund and savings we have amassed on a student budget for our family of 8 in the past 18 months. Life is very different though the budget is tight. For us the key move was decluttering and beginning a journey into simplicity and intention. The finances have naturally followed. Now every dollar has a job and is spent on paper before it’s spent in real life. Dave Ramsey’s a great resource but this blog post makes it much more accessible for those not prepared to go full on DR at the outset.

For me the best motivation to saving is seeing my spendings. I always thought I spend little but after the first month when I have written down my every spending – I was terrified! “just this” and “only that” purchases are adding up… Tracking your expenses is necessary.

I like the idea of an automatic withdrawal every month into a savings account – but it’s not a full solution. Most of the 20 – 30 somethings I know have no idea how to budget, and while a savings account is a good first step, it doesn’t solve the problem of ‘whoops! I overspent, gotta use that $20 I saved for gas.’ Simple bank, You Need a Budget (YNAB app) and checking out the subreddits r/frugal may be a better plan over all.
As always, YMMV. http://bit.ly/1UgWVam

I’ve started using an app called Digit that slowly pulls money from your checking and deposits it into a savings account that is not connected to your checking account. It sends me text updates daily and I can always check my balance. It seems I’ve already put away $250 in two months pretty painlessly. I didn’t even miss it. I think sometimes it’s easier having something pull out the cash than making the decision to do it myself!

Our grandson is almost six. When he was born, I started a savings account for his college. As of right now, I have saved almost $8,000 in that account. And we are retired grandparents with a small income. It can be done. Every quarter I save for him makes me feel good!

Spot on! Kids grow up so fast and in a few years your grandson probably won’t remember any toys or trinkets you bought him, but he will bless you when he needs tuition or money to establish his future.

Good for you Noel. We have done the same for each of our grandchildren. Even a small amount every month works because it adds up over the years until they are ready for college. I think that investing in their future is the best gift you can give your grandkids.

For any of you who live in Canada, check out the benefits of a Registered Education Savings Plan. [The government of Canada will match your savings inside an RESP. The match is called the Canada Education Savings Grant (CESG). Everyone gets the 20-per-cent match on $2,500 contributed per child per year, but if your income is lower, you can get a 30-per-cent or 40-per-cent match on the first $500 saved each year.]

Thank you for writing this! I KNOW I missed out on saving thousands of dollars by not enrolling in my company’s 402b..I didn’t understand the theory of pre tax contributions and finally started small and love to watch it grow!
I too live by a spreadsheet to know where every penny goes and have been able to save almost $1,000 in the past five months!!! I now have two bank accounts-both with direct deposit. One is for general household bills which are all paid automatically. The other is for weekly spending including groceries, gas, birthdays, hair appointments, etc. AND I DON’T FEEL DEPRIVED AT ALL!!!
And then there’s the minimalizing around the house…what a cleansing experience!!!

I used to know a wood shop teacher and he made me what he called a “FUN FUND.” This was etched into the side of an octagonal, wooden bank…that was nailed shut. I stuck change and occasional dollar bills – I REALLY had to know when it was time to bust into it since we had to take a saw and cut the top off!

I don’t buy non-essentials and I still don’t know if I could save $10 a month and not miss it for necessary things. I have a lot of expenses because I am recovering from severe health problems and natural medicine is not covered under health insurance, I help my mother pay her mortgage, I am a stay at home homeschooling mom and I am caring for a destitute dying relative. All that said, I think given the circumstances I am doing the right thing by spending my money on what is important-my health and helping those in need- so I am ok with not saving at this time. I do have about $3000 in savings that I wouldn’t touch unless we had an emergency and I will start adding to that when I am able. My point is that saving is great but sometimes it is not an option.

I split each paycheck to auto-deposit a set amount into checking and into savings each pay period. This really helps me save money without thinking about it. I basically give myself 1/2 of my paycheck to live on and pay bills, and save 1/2. I learned this from a past coworker and it has been a huge help for me for saving money and paying off debt. When you don’t see the money, you’re less likely to spend it.

My top tip for people working city jobs: stop buying coffee, cappuccino, latte etc. Get a French press for the office and a bag of fresh coffee that will last weeks. Honestly, the small amounts saved from every takeout drink really adds up! Those small amounts can be your savings.

Dear Joshua, it is always a pleasure to read your articles. Both your solutions and your approach to life are simple and reassuring. It’s good to be reminded of good habits.
Thank you for your effort and for the excellent information you always send us.

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Thank you very much for this inspiring post. I am 49 and never saved, although in recent years I know I should be but never think I can afford it (my husband being out of work for the last few years has made it more difficult, but he has part-time work now which has potential to increase to full-time, so things are on the up :-)), but after reading this I logged onto my bank account and have set up a fortnightly automatic payment into my savings account (already had it set up from a brief stint at trying to save previously), so we will see how it goes. Thank you, again.

I too never thought I had enough to save until the last couple of years.. I just decided to start small! It really does grow… amazingly!! The automatic transfers are the way to go. I now have a few different savings accounts for different things; son’s college, emergency savings, vacation savings. I have automatic transfers done weekly so the amount seems like just another coffee, gas, or misc. purchase that I’d probably be spending on something else anyway. It’s funny how you think you don’t have enough, but I always would for the other stuff. The key is, don’t start out with too big of an amount and don’t steal back out of it unless it really is an emergency!

Thank you, Joshua! I opened a new savings account at my credit union right away, and my mind is buzzing with ways to fill it. I have a budget, and I do give some, but I didn’t take savings seriously enough. Starting today, this will be different.

I want to also add a word of caution…it takes 2 signatures to open a joint checking and savings account, but only takes ONE person to close it out and remove all your money. 3 years ago, my now “ex” closed out our accounts and took off with Every dime we had saved and accumulated. Think about setting up an account in both names to pay the bills perhaps, but consider setting aside savings in your OWN name…wish I had gathered a nest egg…instead was left penniless…even lost my house! Plan ahead!

Pay yourself first! This works no matter how old you are and how much money you make.

Have 10% of your net income taken off at source and put into a savings account. You soon will not miss it and it will add up quickly. It doesn’t matter if you make $10 or $100,000 you pay yourself 10% right off the top. Once you have accumulated enough, you can invest this money for your long term savings goal.

Having another savings account for emergencies is also a really good idea if you can manage to do both.

Financial security is so much more rewarding than anything you can buy!

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